Pipeline Magazine spoke exclusively to Shigeru Muraki, Executive Advisor, Tokyo Gas about the future of LNG in Japan.
The global gas market has seen a big change in recent years since the shale gas revolution occurred in the US. Following the Paris Agreement in 2016, global warming issues are now coming to the forefront, and the energy market is entering a grand transitional period. As represented by the commencement of the gas market liberalisation in Japan, 2017 is already signalling the beginning of the change in the Asian energy market. So I believe it is an important period to fully explore the impact these changes will have towards the Asian and global energy market.
Gastech 2017 is a very important conference that brings together many key players from various sectors and provides opportunities to discuss the key trends and policies that will affect the gas market and LNG industry.
The Gastech exhibition and conference is the perfect communications platform for energy professionals, and there are many opportunities to meet with the most important players in the energy market. Ultimately, what we would like to achieve, is to secure meetings with various key stakeholders in the market. As the conference will be attended by many players from various sectors, we are looking forward to meeting many attendees, from major companies to Asian utilities.
Whilst there are many gas-related conferences all over the world, Gastech 2017 is unique because of its large scale, and it’s Global Meetings Service, which facilitates meetings with ease.
Future for gas & LNG in Japan
Current long-term forecasts by the Japanese government shows the demand in natural gas will decline by 2030 due to the shift in the balance of energy consumption such as the gradual restart of nuclear power.
However, the nation’s current nuclear situation cannot be resolved easily as we have seen nuclear power coming back at a snail’s pace. In such circumstances, and also with the global movement towards a green future supported by the Paris Agreement, I strongly believe LNG will continue to play a significant role in Japan’s future.
Development of infrastructure is a major challenge. For example, some Southeast Asian countries are shifting from being a gas exporter to becoming an importer, however the lack of infrastructure has been a hurdle in meeting their domestic demand. As such, the development of domestic infrastructure, including regasification terminals and pipelines, are a challenge in this region.
Collaboration with neighbouring countries is also an important aspect. A number of regions have the ability to produce significant amounts of renewable energy. For example Russia, in Siberia, has the potential to develop hydro power. While Mongolia can provide wind power. These countries do not have a demand domestically for these power sources, although they could potentially provide to their neighbouring countries by developing and connecting infrastructures. Pipeline access from Russia to China is progressing by the construction of the Power of Siberia pipeline.
The generation of renewable energy has accelerated, but it leads to questions, such as how the existing grid system will accommodate the influx, and the reliability of the energy generation. While demand management and digitalisation technologies will support the grid system, natural gas will still have to be one of the major sources of energy to accommodate the fluctuation of renewables. Even in the IEA’s 450ppm scenario, natural gas remains a key source.
My perspective is that oil will peak by 2030, and demand for natural gas will increase in the next two decades because of new markets and new sources of energy. Governments will veer away from the installation of new coal fire power stations as they will be very difficult to maintain both financially and politically, especially in light of the push to end global warming.
Battery technology has witnessed developments primarily due to the introduction of renewables and electronic vehicles (EV’s). As increasing numbers of EV‘s are introduced to the market, it has become clear that they cannot be the only solutions for automobiles. Developments in technology have led to electrification, this shift means that its now more important than ever for fuel cells to be able to retain their energy reserves.
Renewables and natural gas need not compete for the affections of the consumer - the technologies can complement each other, meaning that natural gas can contribute to the overall success of renewables, battery and fuel cell technologies.
Key international gas & LNG projects
The new American business model which separates supply, transport and liquefaction, is a significant shift away from traditional integrated LNG projects. There seem to be multiple new LNG projects planned in the US, followed by some potential LNG projects in East Africa, Russia, Canada and Alaska.
In the past we participated in a number of upstream projects in Australia. Upstream investment provided us with a profit, but our minor share meant that we didn’t have full control. US LNG projects look different as we can liquefy our gas and transport it ourselves. I believe our investments in the US will give us a lot of new opportunities in the upstream business.
This interview appreared in the Gastech Preview in February 2017